roth conversion

[ianleonard]

I am getting married next year and we may recieve a salary above the limit for contributing to a roth IRA, she has the option to contribute to a 401k with her job but i do not have any option so i contribute to a roth. If we are in above the salary limit for contributing to a roth ira, how does a backdoor roth work? do i contribute to a tradiitonal IRA with after tax dollars and recieve a tax credit since i have no option from my employer - if this is the case, to do a backdoor roth conversion will i simply lose the tax credits? 

[Alicia65]

First congratulations on your upcoming marriage.

Because of the IRS income limits it is possible that you cannot make a direct contribution to a Roth IRA.  The Backdoor Roth is a way to get around the limits. To do this you need to make a non deductible contribution to a Traditional IRA with an IRA custodian of your choice. Then you convert your Traditional IRA into a Roth. There is no tax complication because you made a non-deductible contribution to the Traditional. Because the Modified adjusted threshold does not apply to conversions the limitation does not apply. Repeat this process every year your income is above the limits.